News release

HP Expands Retail Publishing Portfolio to Help Retailers Take Advantage of $73 Billion Market Opportunity

Company sees 300 percent growth of global retail publishing footprint in 2010

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HP today announced the expansion of its extensive retail publishing portfolio with new partners and solutions designed to help retailers profitably grow their in-store photo offerings and capitalize on the projected $73 billion retail photo opportunity.⁽¹⁾

At the upcoming PMA tradeshow (Feb. 21-23, booth 3120), HP will showcase:

• The first public demonstration of the versatile and fastest dry minilab printer on the market today – the HP Photosmart ML1000D. The printer allows for double-sided photo book pages and calendars in one hour while significantly freeing up labor, saving energy and reducing chemical and water waste.⁽²⁾
• The launch of the HP Photo Center 5 Premier and the HP Instant Print Solution – enabling the creation of high-quality, high-margin creative photo products in-store in a matter of minutes.
• New relationships with popular sports and entertainment brands that build HP’s portfolio of print-on-demand merchandise to more than 300 properties. The new brands include Live Nation, featuring more than 100 of the world’s leading musicians, as well as the National Basketball Association, National Hockey League, Sesame Street, Marvel, Scholastic, Cookie Jar Entertainment and Warner Bros.
• A new customer agreement with German retailer Rossmann to install HP retail publishing solutions across its chain of stores. Combined with existing customer expansion through 2010, HP is set to grow its global retail publishing presence by 300 percent this year.

“HP is leading the new age of digital publishing, enabling our customers to create phenomenal content and mash it up with the broadest, most exciting catalog of printable licensed content,” said Vyomesh Joshi, executive vice president, Imaging and Printing Group, HP. “This is supported by an unrivaled ecosystem of publishing solutions at home, online and in store that allow customers the freedom to print what they want, when they want, while giving retailers and print service providers the tools they need to capture a share of the lucrative publishing market.”

The fastest, versatile minilab designed with the environment in mind

Debuting at PMA, the HP Photosmart ML1000D Minilab printer is the industry’s first dry, inkjet minilab designed to drive retailer profitability by enabling for the first time in-store, one hour production of photo books and calendars of the highest quality in addition to a wide array of print sizes.

This high-performance, high-capacity minilab is one of the most versatile on the market, delivering up to 1,500 4 x 6-inch prints per hour and photos in 16 different print sizes as well as 8.5 x 11-inch and 12 x 12-inch duplex photo books and calendars.

The HP Photosmart ML1000D Minilab printer boasts superior environmental features compared with traditional silver-halide photo finishing systems:

• Consumes almost three times less energy, helping retailers save up to $1,000 per machine per year and an average of 800 gallons of chemical and water discharge per year. Switching all traditional silver-halide minilabs worldwide to HP retail publishing solutions would save more than 85 million gallons of fresh water each year.⁽³⁾
• Takes only 10 minutes from standby mode to start up versus up to two hours for silver-halide machines, significantly freeing up labor so store associates can focus on sales and customer service. This can potentially save retailers up to $10,000 in labor costs each year.⁽³⁾
• Uses ink cartridges made from recycled plastic as part of HP’s closed loop manufacturing process and produces dry-assembly photo books that do not use glue in the binding system.

Increasing retail output demand while decreasing labor costs

The HP Photo Center 5 Premier and HP Instant Print Solution are the newest updates to the award-winning HP Photo Center portfolio. The versatile and scalable HP Photo Center 5 Premier can be plugged into a retailer’s existing lab infrastructure or serve as a complete solution.

The HP Instant Print Solution is a self-serve, front-of-counter system that lets consumers place orders for prints and creative products for pickup within minutes or at a later time using a secure order storage and release feature. The unattended system allows retailers to increase photo center traffic and revenue from high-margin products without dedicated labor.

Expanding the industry’s largest print-on-demand content library

According to The Licensing Letter, a publication from research company EPM Communications, the worldwide consumer spending on licensed merchandise exceeds $100 billion annually – $30 billion of which is print-based.⁽⁴⁾ HP is tapping into this market by expanding its unrivaled portfolio of web-to-mail, web-to-store and in-store assets for on-demand publishing of popular licensed printable content.

With HP, consumers can now create 18 types of personalized printed merchandise – including posters, calendars and greeting cards – choosing among more than 300 licensed properties from 20 licensed content partners. New additions to HP’s partner portfolio include:

• Sports: The National Basketball Association (NBA) and National Hockey League (NHL)
• Music: Live Nation Entertainment (U2, Madonna, Kiss, Bruce Springsteen, Shakira, Black Eyed Peas and more than 100 other artists)
• Children’s Entertainment: Warner Bros. (Batman, Superman, Looney Toons, Scooby Doo!, Harry Potter), Scholastic Media (Clifford the Big Red Dog, GooseBumps, WORDGIRL), Sesame Workshop (Sesame Street muppets including Big Bird, Oscar the Grouch, Cookie Monster and Elmo) and Cookie Jar Entertainment (Strawberry Shortcake, Caillou, Inspector Gadget).

These brand powerhouses join a catalog of other prominent licensed content partners, including Sony Music, Dr. Seuss, Marvel Entertainment, Curtis Publishing/Norman Rockwell, Marvel Comics, CBS/Star Trek, Nickelodeon, PBS, National Geographic, Getty Images and NASA, which drive more than $17 billion in combined annual global consumer spending on their license-based merchandise.

Consumers can access this content through in-store HP Photo Center kiosks, online through HP content partners’ own photo-print product stores – such as the Dr. Seuss Shop and NBA Photo Store – for home delivery by mail or pickup at retail stores such as Meijer. Consumers also can visit youneek.com, a one-of-a-kind online testing ground for fans to order from a catalog of branded printable merchandise with the same delivery options.

Growing the retail photo business globally with new customers

German retailer Rossmann has chosen the HP Instant Print Solution for installation across its chain of stores. The solution is powered by the compact and efficient HP Photosmart PM2000e Microlab printer and produces lab-quality photos, collage prints, calendar pages and greeting cards – delivered in minutes while customers shop.

The rollout in Rossmann stores, along with incremental growth in existing retail stores, equates to more than 300 percent in expected growth in 2010 of HP’s global retail publishing presence. Over the last year, HP expanded its customer portfolio through agreements with leading retailers such as Duane Reade, Tesco and Kmart Australia.

HP at PMA 2010

During PMA 2010, HP’s Joshi will deliver a keynote speech at the Digital Imaging Manufacturers Association (DIMA) luncheon addressing how HP is transforming the photo industry. The luncheon is scheduled for Saturday, Feb. 20 from 11:45 a.m.-1 p.m. in Ballroom C on the third floor of the Anaheim Convention Center.

Joshi also is the recipient of the 2010 Photo Imaging Manufacturers & Distributors Association (PMDA) Visionary Award. The PMDA awards are given annually to people who have significantly contributed to the imaging industry throughout the year, or throughout their careers, and have had a positive and meaningful impact on the business of photography. Joshi will accept the award at the PMDA dinner on Saturday, Feb. 20 at 7 p.m. in the Platinum 10 Ballroom at the Anaheim Marriott.

Other HP executives will address various topics within the photo industry as part of the following DIMA conference sessions at the Anaheim Convention Center:

• “D33: Photo Publishing Software Shoot-Out” featuring Jorge Simal, HP Retail Publishing Solutions – Saturday, Feb. 20, 10:30-11:40 a.m., Room 304C
• “D41: Commercial Imaging: Fabric and Other Profitable Substrates for Inkjet Printing” featuring Claudia Barbiero, HP Graphics Solutions – Saturday, Feb. 20, 1-2:10 p.m., Room 304A
• “D43: Photo Publishing: ‘Dry’ Printer Roundup” featuring Alex Liff, HP Retail Publishing Solutions – Saturday, Feb. 20, 1-2:10 p.m., Room 303A
• “D76: Photo Publishing: Advanced On-Demand Variable Data” featuring Yishai Amir, HP Graphics Solutions – Monday, Feb. 22, 1-1:50 p.m., Room 304B

More information on this announcement and other news from HP at the upcoming PMA tradeshow is available in an online press kit at www.hp.com/go/pma2010.

About HP

HP creates new possibilities for technology to have a meaningful impact on people, businesses, governments and society. The world’s largest technology company, HP brings together a portfolio that spans printing, personal computing, software, services and IT infrastructure to solve customer problems. More information about HP (NYSE: HPQ) is available at http://www.hp.com/.

⁽¹⁾ Source: Retail Publishing Solutions; HP analysis.

⁽²⁾ Based upon manufacturers’ dry retail lab printer published specifications as of February 2010.

⁽³⁾ f/22 Consulting data on HP vs. silver-halide systems. Assumes both photo finishing systems producing 1,250 prints/day, 360 days/year and actual average power consumption rates for U.S. commercial segment. Water claim based on a savings of approximately 800 gallons/year per unit and PFN data on worldwide total installed base of approximately 106,416 AgX minilabs (September 2009).

⁽⁴⁾ Based on a summer 2009 Research Study by The Licensing Letter, EPM Communications.

This news release contains forward-looking statements that involve risks, uncertainties and assumptions. If such risks or uncertainties materialize or such assumptions prove incorrect, the results of HP and its consolidated subsidiaries could differ materially from those expressed or implied by such forward-looking statements and assumptions. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including but not limited to statements of the plans, strategies and objectives of management for future operations; any statements concerning expected development, performance or market share relating to products and services; any statements regarding anticipated operational and financial results; any statements of expectation or belief; and any statements of assumptions underlying any of the foregoing. Risks, uncertainties and assumptions include macroeconomic and geopolitical trends and events; the execution and performance of contracts by HP and its customers, suppliers and partners; the achievement of expected operational and financial results; and other risks that are described in HP’s filings with the Securities and Exchange Commission, including but not limited to HP’s Annual Report on Form 10-K for the fiscal year ended October 31, 2009. HP assumes no obligation and does not intend to update these forward-looking statements.

© 2010 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice. The only warranties for HP products and services are set forth in the express warranty statements accompanying such products and services. Nothing herein should be construed as constituting an additional warranty. HP shall not be liable for technical or editorial errors or omissions contained herein.